Dr Pepper Snapple Group 5 Forces

Dr Pepper Snapple Group, Inc.

Analysis through Porter’s Five Forces

Threat of New Entrants

There are several barriers to entry when analysing the Dr Pepper Snapple Group, Inc. Looking at how strong the company’s portfolio of brands is, one can easily see how the Dr Pepper Snapple Group have invested greatly in what their consumers prefer in their product. The company has built extremely strong customer relationships over the years and are well-recognised as a quality and consumer-serving company. This brings the level of loyalty among their customers very high, which would be of little worry to the company when considering new entrants into the market. Realistically, the bottled drinks market proves to be a very tough market to enter in to, thus the Dr Pepper Snapple Group, Inc. as an already established and very profitable company would have the upper hand over any new entrants.

Power of Suppliers

The Dr Pepper Snapple Group, Inc. manage a lot of their manufacturing and distribution means themselves, leaving them in a low risk situation where they do not have to rely on many external means. The company has 21 manufacturing facilities and 200 distribution centres in the US. They are also dispersed across their major sales regions. They use their own fleet of delivery trucks along with a small amount of third-party logistics. They are not in a vulnerable position with these suppliers as the majority of their services are provided by their own means.

Power of Buyers

Looking at a market such as the bottled beverages and CSDs (Carbonated Soda Drinks), the power of the buyers is usually quite high anyway as consumers can switch between products easily. Customers may also be price sensitive and thus chose another competitor’s cheaper product instead. In the case of the Dr Pepper Snapple Group, Inc.; this is still a risk and always will be; however, according to the article, the buyers of the branded products in the company’s range are very loyal to their...